Dive Brief:
- The majority (65%) of chief marketing officers said they are already preparing for budget cuts due to COVID-19 shutdowns, per a new Gartner study shared with Marketing Dive.
- The report, which includes feedback from 176 marketing executives and was completed on March 20, found marketers are unprepared for coronavirus-related shutdowns and were already seeing budget cutbacks in 2019. Thirty-four percent of marketers expect business operations to dip in response to the crisis with 10% anticipating severe outcomes, and 2% forecasting business operations to stop altogether, per another recent Gartner study.
- Gartner recommends marketing executives create a "tiger team" and create a plan with these members in order to be ready to function amid budget cuts. The research firm also suggests building adaptable scenarios for what may come and conduct rapid reviews to quickly pivot, if necessary.
Dive Insight:
Gartner's study points to how CMOs can brace themselves for the budget cuts that will likely come amid the economic fallout from coronavirus-related shutdowns, with a majority of these executives already starting to prepare.
The report also reveals that companies are having to catch up quickly to this point of view, as many were caught unprepared for the quick change in outlook. The research firm said executives must be agile and prepare for how to operate on a smaller budget with a skeleton team.
Other areas of the industry beyond brand marketers are also preparing for a slowdown. Ad agencies anticipate layoffs, with more than 65% of advertising professionals saying they fear company layoffs as a result of the pandemic, according to a recent report from professional social network Fishbowl. This number is above the average 54% of professionals across industries that anticipate coronavirus-related revenue losses and layoffs at their company.
Some ways in which marketing could change during the current health crisis have started to emerge. As non-essential stores have closed and people remain at home, brands are focusing more on e-commerce to help maintain sales. However, a recent report from Profitero and Kantar found that most brands don't feel their e-commerce offerings are up to par. The research found just 17% feel they are ahead of the curve or leading in that space, and 71% feel they have a strong focus in e-commerce, but are still catching up to or keeping pace with competitors.
As brands look for ways to survive the crisis, many have adjusting how they produce marketing collateral to the current context.
For instance, coffee brand Trade made a video ad remotely with the director guiding employee participants in how to shoot their parts using smartphones. Ford, Toyota and Hyundai used existing footage and recut clips with new messages to produce fresh spots that better align with the current environment. Other brands like Hasbro and Nature's Bakery are ramping up digital content for parents juggling work and homeschooling during shutdowns and using social media to promote it.
These approaches to production can be less expensive than traditional ad shoots, which could be one way for brands to cut costs.
